5 Common Problems Faced During a Franchise Business

Common Problems Faced During a Franchisee Business

Franchising allows brands to expand their business rapidly in different directions. For any franchisor, it’s an utmost priority to make sure that same business model & norms are being followed. This includes branding, product quality, equipment, and other important factors. While franchisors make sure all the factors are being met without any compromise, it’s up to Franchisee to make sure that the product sells well.

There are proven methodologies & strategies followed during business expansion, however, there are numerous obstacles faced during expansion. Here are the 5 most important problems faced during franchisee expansion:

Product Consistency

It’s important for any Franchisor or Franchisee to make sure that product quality is uncompromised at all levels. Fail in the product quality makes it tough for the customer to trust the Franchisor and hamper the brand worth.

The cost of managing and running a franchise business upfront is one of the major expenses any franchisee or franchisor has to bear.

At times, franchisors have high expectations regarding payout, commission & margins. Under such circumstances, where the franchise has paid a huge sum to start a business, coping with margins, profits & commission becomes an obstacle for sustainability.

Infrastructure Management

The high cost of infrastructure & its maintenance requires huge monetary expenditure. The amount of money spent on infrastructure rent, amenities like electricity and water count for a major expense. Most of the Franchises fails to fulfill such high expense and hence is one of the important obstacle faced.

Brand Support

Having a cordial relation between the brand and franchisee is a must to keep the business up and running. Business brawl, differences between franchisor and franchisee become the root cause of the decline of any franchise outlet.

In such cases, serious damage is done not only to the brand but also to the franchise. Hence, maintaining a good understanding between franchisee and franchisor is a must and is an avoidable obstacle.

Innovation & Creativity

Many brands love to experiment with their product and service. the idea may work and give more than expected results or may fail off, bringing high losses which are incurred during the process.

As a result, many brands and franchisors are reluctant of experimenting with something new and innovative, which brings mundane and boredom across the table. This silently becomes an unnoticed obstacle for any business and degrades the product quality.

Now you are aware of all the important & focus areas one should consider while running a franchise business. Want to add more to it? Do give your ideas in the comment section below!